In the past, various entities, such as the retirement systems of certain municipalities, have experienced substantial financial problems which resulted at least in part from a lack of knowledge of their cash and asset positions (investments). As a result, the governing bodies of such entities have ascertained a compelling need to have a better knowledge of their investments and of the flow of information between such entities as, for example, the plan sponsor of a pension fund, and the investment managers which manage investments of the funds, as well as the custodians, such as banks, in order to reconcile information concerning such investments.
This need for a more complete knowledge is not isolated to any particular plan sponsor, and the need is also evident, in general, among all entities which manage money entrusted to them by third parties. For example, a plan sponsor may have a relatively large number of investment managers who manage monies on behalf of the pension or retirement fund, and the plan sponsor may generally have a single custodian or multiple custodians. Typically, each investment manager has a different way of managing investments and has different systems to keep track of investment portfolios. In order for the plan sponsor to fully understand the trading activity which each investment manager is undertaking, a portfolio management system offers a partial solution.
However, it is also important for the plan sponsor to have a means for delivering information from its investment managers into its portfolio management system on the trade date or as soon thereafter as possible. In order to address that issue, currently, once the plan sponsor deploys its portfolio management system, it informs every investment manager that the investment manager must fax or provide information about the trade on the trade date, or no later than the day after the trade date, which is known as trade date plus one. As a result, each fund manager faxes in all of the trade details, and it is then necessary for plan sponsor personnel to key in this information, which is time-consuming and error prone and which causes many problems.